Florida AG cleared in forced resignation of foreclosure investigators

An inspector general report released Friday cleared Florida Attorney General Pam Bondi of alleged wrongdoing when she forced two investigators to resign in July.

Former Assistant Attorney General Theresa Edwards and a colleague, June Clarkson, were working investigations into the largest foreclosure law firms in the state. Florida AG Bill McCollum launched the probes in 2010. At the time, his office was submitting subpoenas and looking for evidence these firms manufactured court documents to speed up the foreclosure process.

Bondi was elected that November, and just one month after she took office, Clarkson and Edwards claimed their “forced resignation” began, according to a report from the Florida Department of Financial Services Inspector General Neal Luczynski.

What followed in the 84-page report from Luczynski are claims from Clarkson and Edwards of micromanagement and discouragement to pursue the so-called “foreclosure mills” and that their terminations were politically motivated. However, their bosses claimed in interviews that Clarkson and Edwards continually showed sloppy work and were repeatedly warned about a lack of professionalism in hearings with targeted law firms.

“Theresa and I were called in and pretty much dressed down to the point of almost feeling humiliated,” Clarkson said in the interview with Luczynski.

In December, Clarkson and Edwards gave a Power Point presentation created during the McCollum term for the investigation into Lender Processing Services (LPS). The Jacksonville, Fla.-based default services firm signed a consent order with the Federal Reserve in April, pledging to correct mishandled foreclosure documentation.

Clarkson told Luczynksi they were “beat over the head” with the presentation and forced to justify each page. Luczynksi writes in the report, “Clarkson indicated the reason there was the issue with the PowerPoint presentation was because the counsel for LPS went to Tallahassee and, ‘got their ear.’ ”

In his interview with Luczynski, Richard Lawson, the director of the division of economic crimes at the AG’s office, said others in the AG’s office were concerned with Clarkson’s and Edwards’ “unfair aggressiveness.” Lawson also grew concerned with Clarkson and Edwards for holding open discussions with outside third parties, specifically foreclosure defense attorneys in the state.

On April 7, according to the report, Lawson went to his superiors with the possibility of firing Clarkson and Edwards over the Power Point presentation as well as over issues related to the investigations of LPS, the Law Offices of David J. Stern, Schapiro & Fishman, the Law Offices of Marshall C. Watson and others.

Lawson said Clarkson and Edwards were working huge cases and “there was no organizational method whatsoever — there’s no date stamping, no indexing,” according to the inspector general report. He said the files were in disarray and would have to be reopened by new investigators.

Still, in her August interview with Luczynski, Edwards said, “If you go look anywhere you’re gonna find out they haven’t done one damn thing on these investigations since we left that office.”

But ultimately no law or policy was violated in the firings, Luczynski ruled.

“Although Clarkson and Edwards were selected exempt service employees, that is, served at the pleasure of the agency head, their employment was ended after consideration of performance issues that included demonstrating poor judgment and lack of independent investigation on high profile foreclosure mill cases.”

Write to Jon Prior.

Follow him on Twitter @JonAPrior.

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